New sanctions on Russia. Europe says the bill could have "unintended effects" on the European Union’s energy security and could hit companies that are involved in the financing of a controversial new pipeline, Nord Stream 2. The Kremlin said the proposed sanctions bill was "sad news in terms of Russia-US relations" and for the "prospects of their development." As an economist – what effect do you see from this new bill particularly for Russia’s economy? And do you think sanctions work?
Basically this bill means that president Donald Trump who is not trusted by the either party in the congress, cannot revoke the Russian sanctions. There is really no new sanctions that are being introduced. There are certain sanctions that the President would impose according to law. It involves the bill about pipelines - clearly, it won't happen. I think, this is unfortunate that this is a part of the bill that it will not have any practical implications. It will be a matter of the United States, to clarify to the European union in general and to German in particular that sanctions on pipeline will not have any consequences.
It's up to the United States to explain. What the law says that the President is entitled to undertake certain sanctions if he so desires. It's clear that the president doesn't not so desire. And the Congress doesn't' push it forward either. These are possible sanctions and they won't be used, it would be better if they hadn't been in the bill.
They will not change anything. Everybody knows that the us will maintain these sanctions until the facts changes on the ground - that is until Russia withdraws from the occupied Donbas and leaves the territory and the border control to the Ukrainian government.
There will be no impact on the German economy and it will have no impact on the Nordstream-2. The point of the us government now is to explain this to the German government and presume they have been able to do so quite clearly. And the statement of the President of the European commission was I think somewhat misdirected. It would have been better if these possible future sanctions hadn't not been mentioned in this bill.
There is no ban on any pipeline in this bill. It says that the president of the united states can sanction certain pipelines if he so desires. But the president doesn't now decide on that, nor does the Congress. These sanctions are discretionary, they can be implemented but they don't ban anything.
This bill gives the president the right to impose certain sanctions it doesn't not mean that he will impose these sanctions. Nothing will happen to any pipeline construction.
Mikheil Saakashvili, the former Georgian president, has been stripped of his Ukrainian citizenship, Ukraine's migration service has said. This decision was based on the conclusions of the citizenship commission". What is the reason behind that? And could it be the removal of a potential rival a year before the parliamentary elections?
Of course, it looks completely political. And this is very unfortunate. There are lots of people in Ukraine, who have double citizenship and they are not being deprived of it. So, this law is applied on highly disquestionable basis. This looks very bad internationally that Ukraine deprives the prominent politician in Ukraine of his Ukrainian citizenship. Regardless the exact reasons.
The new U.S. special envoy for the crisis in Ukraine Kurt Volker said Washington is actively considering to send weapons to Ukrainian government. Will it help to solve the Ukrainian crisis or will it cause escalation of the conflict in Donbas by Russia?
This is the old demand that the US should send armors to Ukraine and Ukraine will be amazingly able to defend itself will a little bit of resources. It's obvious that democratic countries should support Ukraine with military assistance. Here in Washington there was one voice that was against of it - it was President Obama. Otherwise, the whole top in Washington favored sending armors to Ukraine for the last three years. And it would be natural if these changes happen in US policy towards Ukraine. I think, Kurt Volker is very able and sensible diplomat. I think, he is rightly pushing it but I think it would be likely to happen in any case. This is a broad consensus in Washington.
A year ago while in Kyiv you said that one of the main obstacles to Ukraine's development is a lack of judicial reform and a high level of corruption in the government. Do you see changes – as the first step of judicial reform is on its way in Ukraine and we have different institutions that fight with corruption? How do you evaluate the results of its work? Do you think, Ukraine needs an Anticorruption court or can it leave with the current system of courts?
I think, two big concerns are the Prosecutor's general office and the whole court system. We are now seeing the attempt to reform the court system from the top, and highly skeptical that this will be successful. It's good that something is done, but the old judges have far too much say in this process. And this should be removed from their controls. I presume, that it will be a failure. I'm very impressed with NABU, its' really doing a good job. And we are also seeing that anticorruption prosecutor is doing serious job, but then - there is no anticorruption court system yet. I think, it would be much better for the whole court system to set up an independent anticorruption court. It is better than nothing.
The fundamental problem in the whole former soviet union is that there is no real property right. You can only have a property right if you have a well functioning court system. I think the only country but this is an exception is Georgia - thanks to president's Saakishvili's excellent judicial reform in Georgia. What you need to do is to clean out all corrupt prosecutors and judges and appoint new people. That was done in East Germany, Estonia and Georgia. These are three territories that have seen the greatest control of corruption in short period. Why not just sack all the judges and all the prosecutors and build up new institutions with new people on sensible ground?
Just abolish the procuracy, the whole structure is the soviet structure and coming from Petr-1 time. What a prosecutor means in Ukraine is a person who has state license to promote extortion that should not be a state function. So clean out all the prosecutors and then hire the new prosecutors. If the old prosecutors are qualified by good legal standards, then they could come back. What happened in East Germany - was one third of the new prosecutors were young and have not worked there before. One third were West Germans, and one third were re-educated old prosecutors. The same was with judges. Ukraine has so many good lawyers. And there are so few prosecutors and judges really needed. Say, 5 thousand judges would be enough, now there are 8 thousand. The prosecutors probably 10 thousand is enough, now there are eighteen thousand. These are completely manageable numbers. What Ukraine needs - good institutions that would take care of old corrupt officials.
If this will be done, it can be done in a few years - to clean it up. This can be perfectly done in three years.
I think, Ukraine is now seeing a good economic recovery. Ukraine is likely in the second half of the year to reach quite a decent growth rate. With judicial reform, if it really happens, then Ukraine can really take off.